Generally, subrogation refers to an insurer's right to recover losses paid under insurance contracts from parties legally liable for the damages. A problem often encountered is that an insurer or entity that is designated to recover the loss can incur significant costs in assessing the collect-ability of the claimed recovery. Insurers also bear the financial and fiduciary risk of failing to recognize that specific claims may have subrogation recovery potential.
In the insurance industry as well as other financial institutions such as banking, scoring has long been an integral part of underwriting operations. This is largely made possible because of product standardization and buyer homogeneity.
To reduce costs, it has been found desirable to provide an expert rating, or scoring method which identifies subrogation potential early on in a claims handling process, and serves as a predictor of recoverability in order to improve collection efficiencies. It is a further object of the present invention to enable pooling or packaging of claims into portfolios for eventual sale of the subrogation rights on the underlying claims to entities that specialize in such collection activities, for example.